MOSCOW (MRC) --Japan's No. 2 oil refiner, Idemitsu Kosan, has no plan at the moment to give fresh financial aid to Vietnam's Nghi Son Refinery and Petrochemical (NSRP), which has cut production to 80% of capacity due to a funding problem, reported Reuters with reference to an official's statement.
Vietnam's largest refinery avoided a lengthy shutdown last month after a major shareholder secured short-term funding following a disagreement between shareholders about financing for crude, having earlier cut its run rate.
"The refinery is taking measures to bring back its run rate to normal levels," Yoshitaka Onuma, a general manager at Idemitsu, told an earnings news conference on Tuesday, but declined to say when.
"Since the short-term funding issue has been solved, we have no plan to book an impairment loss on the refinery."
Idemitsu has a stake of 35.1% in the 200,000 bpd refinery, which meets a third of Vietnam's petroleum needs.
But the refinery's shareholders are in talks to improve its financial health as the funding is not ample, Onuma added.
Asked if Idemitsu would provide fresh financial support, Onuma said, "We don't have such a plan for now."
Kuwait Petroleum has a share of 35.1% in the refinery, while PetroVietnam holds 25.1% and Mitsui Chemicals owns 4.7%.
NSRP has been struggling because of system trouble that delayed its 2018 launch while oil product margins slumped during the COVID-19 pandemic, but the loss has shrunk, as oil prices have soared since, Onuma said.
As MRC wrote before, Vietnam’s Nghi Son oil refinery officially began commercial production from 14 November 2018, following months of tests. The USD9 billion refinery is 35.1% owned by Japan’s Idemitsu Kosan Co, 35.1% - by Kuwait Petroleum, 25.1% - by PetroVietnam and 4.7% - by Mitsui Chemicals Inc.
We remind that NSRP shut its new polypropylene (PP) plant in Vietnam for maintenance on 24 August, 2021, instead of the initially scheduled date of 17 August, for approximately three weeks. The company decided to postpone the maintenance shutdown at this plant by one week from the previous schedule due to the COVID-19 related lockdown. Thus, the new PP plant came back on-line in mid-September, 2021.
According to MRC's ScanPlast report, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
MRC